A major Czech business delegation is currently in Iran as some of the most
significant trade sanctions against the country start to tumble. Czech
companies have high hopes of cashing in on the opportunities now opening
up.

Jan Mládek, photo: archive of Ministry of Industry and Trade
It was more chance than deliberate planning that meant that a significant
Czech business delegation was in Iran this weekend when the final
declaration came out of Vienna that the nuclear deal with Tehran was
confirmed and some of the most significant sanctions against the country
would come down.

Minister of Industry and Trade Jan Mládek is heading a 60-strong business
delegation that is seeking to pave the way for Czech companies to profit
when the pent up demand from Iran starts translating into orders for
foreign firms. Two similar Czech delegations already began prospecting the
Iranian market last year.

An agreement on economic cooperation with the Iranian government should be
signed on Monday and one of the most significant Czech industry groupings,
the Czech chamber of industry and transport, has concluded an agreement
with its Iranian counterpart.

Minister Mládek explained to Czech Radio how the government level
cooperation could play out:

“At the ministerial level there will be a mixed commission and
there
will also be a sub-committee. It will, for example, deal with energy,
there is
interest in power plants of all types, or in transport there is interest
in
the modernisation of the railway, which I discussed with the minister of
transport, and it will be possible to discuss a whole range of technical
questions on an official basis so that companies can win public
tenders.”

Photo: archive of Zetor
The Czech minister argues that what local manufacturers can offer in Iran
is German quality at more reasonable prices. Czech companies are also
building on a fairly solid reputation dating from the era before most of
the economic sanctions kicked in and even back to the times of former
Czechoslovakia when it was a significant trading partner with Iran then
ruled by the Shah’s regime.

One contact has already been signed during the official Czech visit, for
Brno-based tractor maker Zetor to deliver 250 tractors to Iran. And Czech
steelmaker Moravia Steel also has high hopes of landing a significant
contract take part in the creation of a cross-border rail corridor towards
Azerbaijan.

But while many of the major Iranian contracts will not be flowing
immediately many foreign companies have already started positioning
themselves. The significant step now is that Iran has to a large extent
come out of the cold as regards the world financial and banking system.
The
loans and credits for underwriting specific contracts can now be prepared.
Some sanctions though are still being maintained.

Hana Hikelová is spokeswoman for the Czech state agency EGAP which offers
insurance and credit to companies doing business in high risk countries.
She said the battle for some big contracts had already started.

Hana Hikelová, photo: archive of Czech Radio“It’s been going on for at least a year. We should not fool
ourselves
that a whole series of lucrative orders, for example in the refinery or
oil
sector, are just starting. A lot of these have already been sealed with
some countries.”

The backing that EGAP offers is likely to be crucial with Iran still
having one of the worst credit risk profiles around.